In our previous article we’ve considered the fintech market of Lithuania, and possible reasons for its growth. We’ve also touched on the subject of possible risks of such rapid market growth. Today we’d like to build on the first part of the article, and consider some issues in greater depth.

Today, the Baltic Republic is in first place among all the EU countries by the number of registered companies in the field of financial technology (apart from, of course, UK), but a lot of experts believe there can be certain risks. Let’s not forget the money laundering scandals (Ukio Bank in Lithuania, ABLV in Latvia, and Danske Bank in Estonia), which resulted in destabilisation of the financial system.

The number of fintech startups is growing rapidly in Lithuania, and the republic presents itself as a “gateway to Europe” for companies from Israel and China.

The heyday of fintech companies began against a backdrop of disappointment in the Scandinavian banks, which played a major role in the financial system of Lithuania. After the 2008 crisis, the Lithuanian authorities realised that the major Swedish banks did not contribute very much for developing financial technologies for local customers, and decided to develop their own startups.

According to Marius Jurgilas, a member of the Bank of Lithuania’s board of directors, there was a lack of innovative solutions, after which Lithuanian officials decided to attract fintech companies to the domestic market. Jurgilas is responsible for controlling and stimulating financial innovation in Lithuania at the Central Bank.

According to the Central Bank, over the past year, the regulator has issued permits for the issue of electronic money (e-money) to 64 Fintech companies, while another 40 applications are pending. Thus, according to this indicator, Lithuania is second place after Britain, which has more than 150 fintech companies. But we can say that Lithuania is in first place among all other EU countries (given the Brexit situation).

Even Revolut, headquartered in Britain, has entered the Lithuanian market. facebook.com

Even Revolut, headquartered in Britain, has entered the Lithuanian market, because it needs a banking license in the European market, which has been granted to the bank by the Baltic Republic. According to Richard Davies, the COO at Revolut, the Central Bank of Lithuania is willingly cooperating with them, although it follows strict rules. Meanwhile, a scandal has erupted surrounding this financial company in the Baltic Republic due to the Russian origin of its founder, Nikolay Storonsky.

According to Marius Jurgilas, the Central Bank is closely monitoring the activities of the fintech sector. He claims that it is controlled by 150 Central Bank employees. There is one more alarming moment for such a rapid development of the fintech market in Lithuania besides Russia – relations in this area with China. Apparently, in Vilnius, opinions regarding the attraction of Chinese partners were divided.

Lithuania has to find a balance between fintech as a business prospect and a possible “threat to national security”. Source: unsplash.com

Now Lithuania has to find a balance between financial technology as a business prospect and a possible “threat to national security.”

From England to the Philippines

Greatest hopes for attracting financial technology enterprises to Lithuania are hanging on the UK: now that the country has decided to leave the EU, some enterprises may decide to move to other countries.

It is difficult to give a specific number of how many financial technology enterprises can come to Lithuania in the nearest future, but we can say that we believe that such countries as the UK, Estonia, Latvia, Israel, Germany, Singapore, and the Philippines are really interested in cooperation. The Asian region is of particular interest to us, since there is still a turning point in this sector in Europe. Meanwhile, the entire financial sector is already developing on the basis of financial rather than banking technologies in some Asian countries

Marius Jurgilas, a member of the Bank of Lithuania’s board of directors

Moneta International about the advantages of working in Lithuania

Eyal Nachum, chairman of the board of the Moneta International financial technology company, said that before deciding on investments in Lithuania, the company visited six countries, including Latvia, the Czech Republic, Poland, and the United Kingdom.

Visiting different countries, we met with representatives of market control institutions. We needed specific answers. Some companies’ representatives did not want us to come to them, and we asked why. The answer was as follows - they just don't like us. We did not feel such an attitude when communicating with the Bank of Lithuania or the Invest Lithuania agency, which, on the contrary, supported us. Therefore, we decided to start the business here

All copyright, database rights and other intellectual property rights on the PaySpace Magazine website and all materials published on it are owned by PaySpace Magazine. No part of this site can be reproduced without explicit permission of The PaySpace Magazine.

All materials on payspacemagazine.com are for informational purposes only. PaySpace Magazine cannot accept responsibility for any loss or inconvenience caused by reliance on any material contained in this site.

Please note that despite the topics of the materials created and hosted on this website, PaySpace Magazine is not a financial reference resource and the opinions of authors and blogers are their own and should not be taken as financial/investment advice.